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3Com asset carve up looms

by Andy Donoghue, Network News UK

A profit warning earlier this month and a share price that has fallen 70 per cent over the past two years has prompted analysts to speculate that 3Com will be broken up in the next 12 to 18 months.

Neil Rickard, networking research director at industry analysts Gartner Group, said that the most likely future scenario for the company is that it will be either broken up by 3Com and sold off, or bought by another firm and taken apart for a sell off.

"My gut feeling is that 3Com will not disassemble itself but someone else will. It may well bleed a lot before that happens though," he added.

3Com's third quarter results, announced last week, showed revenue of $1.4bn (#875m) up 13 per cent on the same period last year.

Steve Rowley, European vice president of 3Com, refused to discuss any possible plans to reorganise the business or suggestions that 3Com should sell off its enterprise switching products.

"I can't comment on any plans to restructure. The enterprise is our heartland," he said.

Rickard claimed that uncertainties about the company's future would prey heavily on the minds of anyone thinking of purchasing 3Com's enterprise products in the future. "The expectation is that they will be acquired, the question is by which vendor?"

Evidence that 3Com is at least considering slimming down its operation came last Friday with the announcement that the company is getting out of the storage area network (San) market, without releasing any products and barely five months after entering it. The company revealed that it no longer plans to produce Fibre Channel based hubs, switches and network interface cards for use with Sans. (see Newswire 29 March)